Once Again, Justice Takes a Beating

By David Prathers
2007The Huntsville Times

June 20, 2007

Longtime readers - I guess that's a plural - know I am interested - perhaps obsessed - with the seemingly endless hurdles that Enron investors face in trying to get judicial relief for corporate fraud perpetuated against them.

I am not one of them, except in spirit. I hate the fact that so many employees of that once-thriving company were bamboozled and lost their life savings because of book-cooking. I am even more appalled at the roadblocks to recovery they face in their lawsuits to try to get some of the deep-pocket co-conspirators to ante up.

Previously we've talked about how the Securities and Exchange Commission almost tried to go on record before the high courts as backing Enron's pals in the investor lawsuits against them. When that didn't work - at least, in part, thanks to public outrage - the SEC got involved in other cases that will eventually go to the U.S. Supreme Court.

Logic tells you they have done this in hopes that a court ruling would set precedents that affect the Enron case, thereby having cake, eating same, too.

But even the SEC draws the line on some pro-fat cat moves. That body - three Republicans and two Democrats; its chairman a former member of the GOP House leadership - couldn't stomach a financial playing field where the big boys get all the toys.

That's why it asked the U.S. Justice Department to file court briefs supporting the rights of investors to sue third parties that help clients commit fraud. That way the investors can try to get money from guys who haven't bailed out to Brazil.

So what did the lawyers at the Justice Department, the folks who represent each and every taxpayer, do?

Nothing.

Make that worse than nothing - because doing nothing meant that a deadline for filing slipped by. Now the department couldn't file a brief in the case if it wanted to. (The SEC lacks authority to share its position officially with the court in this case.)

And why was the Justice Department reluctant to do so?

White House aides told The Washington Post that President Bush "expressed discomfort with allowing shareholders and plaintiffs' lawyers to sue third parties."

Remember: The third parties have lawyers. The courts will decide whether the suits have merit. So why would the president not want ripped-off investors to have a chance to take their cases to court?

The only answer can be that some of the president's friends or allies might have to face the music for the frauds they helped perpetuate - if the courts decide that's the case.

The upshot, of course, is that another avenue for Enron investors and other allegedly swindled shareholders has been closed - and not for repairs.

Maybe the people who don't want to see justice done can live with themselves for this.

But I think they must realize one thing.

Justice isn't being served here - and neither is the public that the Justice Department is supposed to represent.

In the court of public opinion, there's ample evidence for a verdict of guilty of felonious special-interest coddling.